Just say no. Motorists could save big by refusing insurers' high renewal premiums

Seven million motorists could save themselves up to £300 a year on average by not accepting the policy renewal quote from their car insurer.

With a fifth of drivers automatically accepting their annual renewal quote, insurers are under no pressure to offer existing customers keenly priced premiums.

The reason drivers give for not even bothering to look for cheaper prices is that they do not believe they will save money, according to research by comparison site Moneysupermarket, which estimates that the average saving on a premium is £300.

Small move, big savings: A fifth of drivers automatically accept their annual renewal quote, yet they could save by switching.

Scott Kelly of rival website Gocompare says: ‘Insurers are notoriously bad at rewarding customer loyalty and new customers almost always get a better deal than existing customers.’

And this year it is even more important for women motorists to check out the cost of cover as the full impact of a new EU law barring insurers from using a person’s sex to set premiums is having a big financial impact.

Women who have looked to renew their car cover since the law came in on December 21 have found they are being hit by price rises of up to 50 per cent or more, according to price comparison site uSwitch.

How’s my driving? Little black box that monitors behaviour at the wheel may save you hundreds

Having a little black box in your car could save hundreds of pounds.

This technology, known as telematics, monitors how you drive, when you are on the road and how far you go.

Telematics policies are becoming increasingly popular with young drivers and those with low mileage as they reward safe and careful driving.

Although still relatively unknown, sales of these policies have increased fivefold in the past two years. The British Insurance Brokers’ Association says telematics policies can knock 30 per cent off the cost, and some insurers claim savings can be as high as 70 per cent.

The box uses GPS to send information back to the insurer about your driving behaviour.

Different types of telematics policies use this information to price their premiums.

For instance, premiums may be based on the number of miles driven or the time of day the car is mostly used. Some will even penalise you if you are on the road between 11pm and 5am. Others will price their premiums based on driving style – speeding, harsh braking and cornering will be frowned on – while rewarding safe drivers with lower premiums.

Current providers of telematics-based insurance policies include the Co-operative, the AA, Coverbox, iKube, insurethebox and autosaint.

Before the rule change, women drivers typically paid less than men as evidence shows they are a safer bet – young women often paid half the premium young men aged 17 or 18 paid.

Insurers base prices on claims experience and young men tend to have more accidents and make more expensive claims than women of the same age.

Since the rule change, insurers have gone back to square one when calculating risk.

Lawyers are warning insurers they may be guilty of indirect discrimination in favour of women if they use factors that indicate whether the driver is male or female.

For instance, premiums for nurses and secretaries – jobs mostly done by women – could be lower than for men.

The AA says a survey found a 24-year-old female secretary paying 5.2 per cent less than last year while a female student of 23 was paying 4.9 per cent more.

Insurers will have to show they are lowering premiums for certain occupations based on claims history rather than the likely sex of the person doing that job.

However, motorists should be careful when adding an older driver to a policy. They must still be listed as the main driver or they will be committing a fraud known as fronting.

While women drivers’ premiums have shot up, men are benefiting from the new EU ruling. Research from uSwitch reveals that premiums for young men under 21 have fallen 12 per cent on average.

The comparison site’s figures show car cover for women overall has risen by eight per cent this year while premiums for men have fallen six per cent. Michael Ossei of uSwitch says: ‘With over 100 providers, there is a big difference between the cheapest and the most expensive quote.’

Other ways to help bring down premiums include increasing the excess – the first part of any claim you have to pay – stripping out expensive extras such as a courtesy car and garaging your car overnight.

Do not personalise your vehicle with expensive modifications and take an advanced driving course as some insurers, such as the AA and Endsleigh, give discounts to those with the Pass Plus qualification.

Once you have found your policy, go on to a cashback site to see if there are any offers. For instance, Quidco is giving £30 back on Sheilas’ Wheels and £50 back on Privilege policies.

Pay up for the whole year in advance if you can afford to as interest and administration charges added to monthly premiums can increase the total cost by as much as 15 per cent.

And check how far you drive each year so that you do not buy cover for too much mileage.